Jones ends quarter with a whimper

DanBurrows

NEW YORK (CBS.MW) -- Jones Apparel Group on Wednesday said it eked out a 2 percent gain in third-quarter profits despite a "dismal" September at retail.

For the three months ended Oct. 4, the New York-based apparel manufacturer reported net income of $95.8 million, or 77 cents a share, compared with last year's $93.9 million, or 71 cents.

Total revenue for the period rose 9.8 percent to $1.3 billion against $1.17 billion last year. Of that, sales increased 9.6 percent to $1.28 billion, while licensing income advanced 39.4 to $13.1 million.

Jones
JNY
said top-line growth was helped partly by the acquisitions of Kasper, Ann Klein and Maxwell Shoe, as well as the launch of its Jones New York Signature collection. Taken together those deals more than offset the loss of its Lauren and Ralph businesses, Jones said.

Speaking on a conference call, Chief Executive Peter Boneparth said higher gas prices, severe weather in some parts of the country and soft consumer confidence conspired to create generalized slowness at retail, but that October business was much improved.

"Clearly throughout the country where there has been cold weather promotions in the category, footwear and cold weather apparel has done better," said Boneparth. "Foot traffic is clearly up in our retail stores and our wholesale customers as well have noted an improvement in traffic over an absolutely dismal September."

Jones' earnings exceeded the Thomson First Call consensus estimate by one cent. Jones affirmed its fourth-quarter outlook for earnings of 40 to 45 cents a share on revenue of $1.04 billion to $1.05 billion.

Full-year earnings are estimated at $2.51 to $2.56 a share on revenue of about $4.6 billion. The company also reiterated its fiscal 2005 guidance for earnings of $3 to $3.10 and revenue of about $4.9 billion. The Thomson First Call consensus estimate expects full-year earnings of $2.53 and revenues of $4.6 billion

Additionally, Jones authorized an additional $100 million share repurchase program and declared a regular quarterly cash dividend of 10 cents a share to be paid November 24 for stockholders as of November 10.

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